Friday, July 11, 2014

The Art Of Managing A Trade

Technical analysis is a complete science, as it includes analyzing numbers, patterns, different support and resistance zones etc. Analysis provides us trade, stop and target but when we enter in that trade, the story becomes different now. If we are long in some trade, then price goes slightly up and then down, closer to our stop loss or sometimes hit our stop loss and then move up again towards our target. This is what happened with most of the trades and traders.

         Managing a trade is different than analysis, and placing stop and target in trade are equally important as of finding a trade. If the stops are too tight, then traders will stopped out quickly from most of trades and if they are wide, then draw down would be higher, similar case for the target. So, how should we set up our stops and targets?

         First of all, we should find our stops and targets through analysis and then check the stop price, that are we able to bear that much loss, if yes then proceed further, if not, then look for another trade. After that, point your stop on chart and check whether your stop is lying on some major support or resistance or clearly visible to everyone, if yes then do not proceed the trade or change the stop. Because these are the points where big boys(High capital traders) haunt novice traders and try to stop them out.

        So managing a trade is an completely art and different from analysis but equally important to that. So always look to every aspect, that how could be you wrong in trading, before entering in a trade.

1 comment:

amarjeet said...

RESPECTED SIR
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